Festive Consumption Slows Amid Economic Uncertainty

Japanese brokerage Nomura reports a slowdown in festive consumption growth to 15% in the current year, compared to 32% in 2023. Retail sales grew modestly both offline and online. Rural and smaller city demand remained steady, but metros witnessed weaker sales. Weddings in December could boost demand.

Japanese brokerage firm Nomura announced on Wednesday that the growth in festive consumption has halved to 15% this year. This is a drastic drop from previous years, which saw growth rates of 32% in 2023 and 88% in 2022, according to their estimates.

While festive demand held strong in rural areas and smaller cities, larger urban centers experienced weaker sales. Analysts note that December weddings might offer a much-needed boost. Concerns loom over economic stability as a 'cyclical growth slowdown' becomes evident, casting doubt on the Reserve Bank of India's growth projections.

The analysis was supported by both anecdotal evidence and conventional economic data. While retail auto sales showed some positive adjustments, indicators like passenger vehicle sales signaled struggles in the wholesale sector.

(With inputs from agencies.)